Fierce Industry Competition... Differentiation Through Content
Keeping Pace with Lotte's 'Digital Innovation' Strategy
Developing Lucy by Gathering MZ Generation Opinions
Lotte Home Shopping's virtual human Lucy is shooting a Lotte Hotel package. (Photo by Lotte Home Shopping)
[Asia Economy Reporter Jeon Jinyoung] Lotte Homeshopping is accelerating its?(han: 탈) homeshopping strategy. It is erasing the traditional home shopping business image with virtual human Lucy, Valleygom, and increasing its content business.
According to Lotte Homeshopping on the 26th, virtual human Lucy was selected as the model to promote the hotel vacation package of Lotte Hotel Seoul. Lucy, a 29-year-old model majoring in industrial design and a concept of an automotive design researcher, has expanded her scope beyond a simple promotional character to an advertising model.
The reason Lotte Homeshopping has stepped into the content field from a commerce-centered business is due to the environment the industry faces. The structure, which has already become a red ocean and is difficult to generate profitability, has not improved. In fact, Lotte Homeshopping's operating profit in the third quarter decreased by 10.5% compared to the previous year. As home shopping profits decline due to issues such as transmission fees and competition among companies intensifies even in live commerce, a differentiation strategy has been sought.
The overall group atmosphere has also greatly influenced the momentum for promoting?(han: 탈) homeshopping business. Lotte aims to achieve company-wide digital innovation, and earlier this year, Chairman Shin Dongbin held a meeting in the metaverse, ordering digital transformation.
Lotte Homeshopping is considered one of the fastest in digital transformation among affiliates. This was largely due to the will of CEO Lee Wanshin of Lotte Homeshopping. A separate digital human team was created to advance Lucy and nurture her as an influencer, and except for the team leader, all employees were filled with the MZ generation (Millennials + Generation Z). CEO Lee also gathered opinions from young members by putting the process of selecting Lucy's name and face shape to an internal vote during her development. A Lotte Homeshopping official said, "CEO Lee tends to look at the business long-term without being obsessed with short-term results," adding, "Even when Valleygom was not as popular as it is now in 2018, he quietly monitored and continued to support the business."
As a result of these efforts, Lucy has received more than 100 advertising proposals to date. She also served as a marketer for Ssangyong Motor's 'Torres' new car launch event, and since June, she has signed an exclusive contract as an artist under Chorokbaem Media. Next month, she plans to enter live broadcasts selling luxury brand products through Lotte Homeshopping's YouTube channel.
However, it seems that the?(han: 탈) homeshopping and content-focused strategy will take time to translate into performance. Lotte Homeshopping plans to first focus on capturing the MZ generation and aligning with the market atmosphere shifting toward digital. A Lotte Homeshopping official said, "It is difficult to expect meaningful results in the early stages of character or content business. We need to observe the situation," adding, "However, since Lucy continues to receive love calls from advertisers and the response is good, we expect it to be linked to profits in the future."
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